Shire seeks AbbVie bid of close to 53 pounds per share: sources

July 12, 2014|By Olivia Oran and Soyoung Kim | Reuters

(SUZANNE PLUNKETT,, REUTERS)

NEW YORK (Reuters) - Shire Plc is seeking a higher takeover offer from U.S. drugmaker AbbVie Inc that would value the company at about 31 billion pounds ($53 billion), according to people familiar with the matter.

Shire, which on Friday confirmed it has met with AbbVie to discuss a takeover, had asked AbbVie to sweeten its offer to close to 53 pounds per share in order to get blessing from the Dublin-based maker of drugs for rare diseases, the people said.

Shire's asking price is not far above AbbVie's latest 51.15 pounds per share bid and the relative small valuation gap suggests the two sides may be getting closer to agreeing on a deal.

Under British takeover rules AbbVie has until July 18 to announce a firm offer for Shire or walk away.

Representatives for Shire and AbbVie did not respond on Saturday to requests for comment. The sources asked not to be named because the discussions are private.

AbbVie, which is based in suburban Chicago and makes top-selling arthritis drug Humira and other medicines, raised its cash and stock offer to about $51 billion on Tuesday, hoping to win over its reluctant target after three earlier offers were rejected.

AbbVie is eager to buy Shire both to reduce its U.S. tax bill by moving its tax base to Britain - a tactic known as inversion - and to diversify its drug portfolio. AbbVie currently gets nearly 60 percent of its revenue from rheumatoid arthritis drug Humira, the world's top-selling medicine, which loses U.S. patent protection in late 2016.

In an interview with Reuters on Tuesday, AbbVie Chief Executive Richard Gonzalez refused to be drawn on the possibility of increasing his offer, but said he was leaving all options open.

AbbVie's move on Shire is the second attempt by a U.S. drugmaker to buy a London-listed rival after Pfizer's $118 billion pursuit of AstraZeneca failed last month over price. That deal was also driven in large part by tax savings.

Gonzalez met with Flemming Ornskov, his counterpart at Shire, on Thursday in New York, a person familiar with the matter told Reuters on Friday. The meeting followed urging from some top investors in Shire, who have written to the company's board expressing their support for a deal and arguing that AbbVie's latest offer is a good enough number for Shire to allow for due diligence.

Shire, founded in Britain, is headquartered in Dublin but managed from Boston and has most of its sales in the United States, resulting in a minimal business footprint in Britain.

As a result, the potential takeover of the company has not created the political storm that accompanied Pfizer's pursuit of AstraZeneca.

Shire's Ornskov has said he is happy for the company to be sold at the right price - but he has also laid out a detailed case as to why it is worth a lot more than AbbVie has offered.